The case of the prime government plot sold off for `peanuts`

JF-Expert Member

-Said to have secretly granted 3-year extension to deadline for private buyer to cough up outstanding 1.41bn/-

THISDAY REPORTER
Dar es Salaam

THE scandal over the sale of an expensive government property in Dar es Salaam has continued to unfold, with latest reports suggesting that senior officials in the now-defunct Presidential Parastatal Sector Reform Commission again deliberately flouted government regulations in favour of the private buyer just days before PSRC was officially disbanded.

The real estate property in question comprises a prime plot with registration number 162/38, situated at the junction of Mirambo Street and Samora Avenue in the citys central business district, where private developer El-Hillal Minerals (Tanzania) Limited has stated plans to develop an international diamond auction market.

After initially agreeing to sell the property to El-Hillal Minerals (Tanzania) Limited for the astonishingly cheap price of 440m/-, the PSRC later changed its mind and gave the buyers a deadline of up to December 31 last year (the day when PSRC would legally cease to exist) to pay up an additional 1.41bn/-, thereby bringing the sale price to 1.85bn/-.

Failure of this, the government would repossess the property, the then PSRC executive chairman Ali Karavina stated in public.

However, well-placed sources have now revealed to THISDAY that on December 21, just ten days before the deadline expired, the PSRC made a secret addendum to the sale agreement, effectively extending the period in which El-Hillal Minerals would be required to raise the extra 1.41bn/- for three whole years (up to December 31, 2010).

It has been learnt that both buyer and seller agreed to recognise this addendum as part of the contract, and consented to allow the addendum to supersede the earlier terms of their agreement.

Insiders say it was Karavina himself who signed the controversial addendum without the knowledge of PSRC commissioners and other senior officers in the institution.

According to an impeccable source familiar with the suspect deal: This deadline extension &#65533; for no less than three years - was done in secret, and most people in government are not even aware of it. Most, but not all&#65533;

Another questionable thing about this transaction is that the title deed (for the plot) has already been transferred from the government to El-Hillal Minerals even without the actual sale being concluded, since the buyer has so far failed to pay the outstanding amount, the source added.

It remains a mystery why PSRC officials decided to extend the grace period for full payment by such a long period only days before the institution was formally disbanded; especially considering that Karavina himself had previously announced through paid newspaper advertisements that the government would repossess the plot if the buyer failed to pay up the extra 1.41bn/- by the stated deadline (December 31).

The adverts themselves appeared to have been prompted by a series of investigative articles published by THISDAY, which revealed that although a valuation report commissioned by PSRC itself had valued the government plot at no less than 1.85bn/-, it ended up being sold by the same PSRC for just 440m/-.

The articles also established that the PSRC also deliberately flouted laid-down government regulations by failing to invite bidders in a transparent and competitive process or put up the property for public auction.

Former Prime Minister Edward Lowassa is understood to have been approached by El-Hillal Minerals company owner Hillal Hamad Hillal, and afterwards officially directed the PSRC to assist Hillal after his previous attempts to buy the plot for the lower price had failed.

The sale of the property, situated as it is right in the middle of Dar es Salaams central business district, is further understood to have ruffled some angry feathers within government circles which felt that the plot should have been used to construct a much-needed office accommodation complex for government ministries and agencies.

The Treasury currently pays billions of shillings to private landlords each month from taxpayers money for the accommodation of government offices.

JF-Expert Member

-Said to have secretly granted 3-year extension to deadline for private buyer to cough up outstanding 1.41bn/-

THISDAY REPORTER
Dar es Salaam

THE scandal over the sale of an expensive government property in Dar es Salaam has continued to unfold, with latest reports suggesting that senior officials in the now-defunct Presidential Parastatal Sector Reform Commission again deliberately flouted government regulations in favour of the private buyer just days before PSRC was officially disbanded.

The real estate property in question comprises a prime plot with registration number 162/38, situated at the junction of Mirambo Street and Samora Avenue in the citys central business district, where private developer El-Hillal Minerals (Tanzania) Limited has stated plans to develop an international diamond auction market.

After initially agreeing to sell the property to El-Hillal Minerals (Tanzania) Limited for the astonishingly cheap price of 440m/-, the PSRC later changed its mind and gave the buyers a deadline of up to December 31 last year (the day when PSRC would legally cease to exist) to pay up an additional 1.41bn/-, thereby bringing the sale price to 1.85bn/-.

Failure of this, the government would repossess the property, the then PSRC executive chairman Ali Karavina stated in public.

However, well-placed sources have now revealed to THISDAY that on December 21, just ten days before the deadline expired, the PSRC made a secret addendum to the sale agreement, effectively extending the period in which El-Hillal Minerals would be required to raise the extra 1.41bn/- for three whole years (up to December 31, 2010).

It has been learnt that both buyer and seller agreed to recognise this addendum as part of the contract, and consented to allow the addendum to supersede the earlier terms of their agreement.

Insiders say it was Karavina himself who signed the controversial addendum without the knowledge of PSRC commissioners and other senior officers in the institution.

According to an impeccable source familiar with the suspect deal: This deadline extension &#65533; for no less than three years - was done in secret, and most people in government are not even aware of it. Most, but not all&#65533;

Another questionable thing about this transaction is that the title deed (for the plot) has already been transferred from the government to El-Hillal Minerals even without the actual sale being concluded, since the buyer has so far failed to pay the outstanding amount, the source added.

It remains a mystery why PSRC officials decided to extend the grace period for full payment by such a long period only days before the institution was formally disbanded; especially considering that Karavina himself had previously announced through paid newspaper advertisements that the government would repossess the plot if the buyer failed to pay up the extra 1.41bn/- by the stated deadline (December 31).

The adverts themselves appeared to have been prompted by a series of investigative articles published by THISDAY, which revealed that although a valuation report commissioned by PSRC itself had valued the government plot at no less than 1.85bn/-, it ended up being sold by the same PSRC for just 440m/-.

The articles also established that the PSRC also deliberately flouted laid-down government regulations by failing to invite bidders in a transparent and competitive process or put up the property for public auction.

Former Prime Minister Edward Lowassa is understood to have been approached by El-Hillal Minerals company owner Hillal Hamad Hillal, and afterwards officially directed the PSRC to assist Hillal after his previous attempts to buy the plot for the lower price had failed.

The sale of the property, situated as it is right in the middle of Dar es Salaams central business district, is further understood to have ruffled some angry feathers within government circles which felt that the plot should have been used to construct a much-needed office accommodation complex for government ministries and agencies.

The Treasury currently pays billions of shillings to private landlords each month from taxpayers money for the accommodation of government offices.